ORIGINAL REPORTING, JUNE 10: HOW UTILITIES ARE TRANSFORMING THEIR FUEL MIXES

More than 80% of utility executives foresee distributed energy resources changing their company’s fuel mix in coming decades, according to Utility Dive’s new report, the State of the Electric Utility 2015.

Nearly as many (79%) see their companies adding utility-scale solar. A very large majority see additions of natural gas (74%) and wind (72%) changing the generation portfolio. And over three-quarters of the executives queried (77%) see a diminishing role for coal.

“Gas is now around $3 per MMBTU but I remember being hailed as a virtual genius at Edison when I signed a contract for $14 natural gas,” said former Southern California Edison vice president Jim Kelly at the recentVerdeXchange 2015 conference. “Our supply of natural gas seems assured for years to come. Many states are proclaiming they are going green by switching from coal to natural gas. It is a huge trend.”

But price is not everything. Compliance with renewables targets and mandates was the most compelling reason that 42% of the utility executives queried by Utility Dive expect more renewables in their portfolios. Another 31% say sustainability is their compelling reason for investing in renewables. Only 7% see low prices as a factor, and 9% still see no compelling reason to invest in clean energy at all.

Only 12% of those surveyed as yet have confronted emissions standards as a driving force but most recognize the Obama administration’s Clean Power Plan will begin to gain momentum later this year.

Just over a third of the Utility Dive respondents (34%) believe the Environmental Protection Agency should hold to the current 30% emissions reduction target and 2030 timetable and another 28% believe EPA should be more aggressive. 20% want the effort diminished and 19% want it scrapped.

With California’s new 50% renewables by 2030 proposal from Gov. Jerry Brown (D) and its sustainability-minded utility customers, the state’s electric utility leaders likely agree with the survey findings except on the subject of emissions standards.

To achieve California’s mandate and meet its ahead-of-the trend AB 32-driven emissions reduction requirements, renewables and efficiency are high on their list.

“The studies the California Air Resources Board (CARB) has seen indicate everything will have to be electrified and the electricity will have to come from renewables,” said CARB Chair Mary Nichols. “It is pretty hard to see how in 2050 California can be burning much of anything if it is going to meet its goals.”

On the other hand, Southern California Gas has put forward some reasonable ideas about renewable natural gas, Nichols acknowledged. “Diversity is important and we cannot afford to be completely dependent on any one source of supply, given the geopolitical and environmental uncertainties.”

But it has to be renewable diversity, Nichols told Utility Dive. “Yes, renewable methane, renewable gasoline, renewable electricity, but whatever it is, it will have to be renewable.”

“Natural gas is sweeping the fuels markets on the national level,” California Energy Commission Chair Robert Weisenmiller agreed. But methane leakages must be resolved and pipeline explosions are unacceptable. “One San Bruno is way too much,” he said of the San Francisco disaster that cost eight lives.

“Utilities are enablers of distributed generation,” California Public Utilities Commission (CPUC) Commissioner Carla Peterman observed. “Consumers don’t want to be off the grid. They want to get on the grid in a more actively engaged way. They want solar and they want to sell their power to other consumers as well as to provide ancillary services for the grid. But they want a simple interface, which requires a complex infrastructure behind it.”

The tension between utilities, distributed energy resources (DERs) developers, and consumers is because they all want to be heard, Commissioner Peterman said. “Utilities want to be heard on things that need to be addressed like over-generation and cross subsidies. Customers and developers want it heard that the product can be good for the grid and offset peak demand.”

It is the job of regulators and policy makers to bring them to the table to work those things out, she said.

“The assumption that DERs are anti-utility is a mental block,” said NRG Energy VP Robyn Beavers. “Utilities could easily jump into it.”

The just-introduced AB 197 from Democratic Assemblyman Eduardo Garcia is one of the first official previews of how California will realize Brown’s 50% proposal. Coincidentally, it seems to validate Beavers’ observation and the Utility Dive respondents’ conclusions.

The bill would:

-make statutory a requirement that investor owned and publicly owned utilities get 50% of their power from renewables by 2030

-obtain through the CPUC a cost-benefit evaluation of all renewables as base-load and grid support resources

-make statutory the California Loading Order that requires utilities to meet load first, if feasible and cost-effective, through energy efficiency, demand response, and renewables before procuring other generation

How much success Garcia and his allies have in pushing the bill through the state legislature remains to be seen, but given the strong Democratic majority in the state, it seems a safe bet that some form of Gov. Brown's renewable energy targets will be passed by lawmakers. If anything is to derail their plans, it may be unexpected technological change more than political contention.

“Things in this industry change very slowly and then they change very fast,” Renewable Funding LLC CEO Cisco DeVries, who originated the property-assessed clean energy (PACE) concept. “We are pivoting toward that fast change right now.”

Review of OIL IN THEIR BLOOD, The American Decades by Mark S. Friedman

OIL IN THEIR BLOOD, The American Decades, the second volume of Herman K. Trabish’s retelling of oil’s history in fiction, picks up where the first book in the series, OIL IN THEIR BLOOD, The Story of Our Addiction, left off. The new book is an engrossing, informative and entertaining tale of the Roaring 20s, World War II and the Cold War. You don’t have to know anything about the first historical fiction’s adventures set between the Civil War, when oil became a major commodity, and World War I, when it became a vital commodity, to enjoy this new chronicle of the U.S. emergence as a world superpower and a world oil power.

As the new book opens, Lefash, a minor character in the first book, witnesses the role Big Oil played in designing the post-Great War world at the Paris Peace Conference of 1919. Unjustly implicated in a murder perpetrated by Big Oil agents, LeFash takes the name Livingstone and flees to the U.S. to clear himself. Livingstone’s quest leads him through Babe Ruth’s New York City and Al Capone’s Chicago into oil boom Oklahoma. Stymied by oil and circumstance, Livingstone marries, has a son and eventually, surprisingly, resolves his grievances with the murderer and with oil.

In the new novel’s second episode the oil-and-auto-industry dynasty from the first book re-emerges in the charismatic person of Victoria Wade Bridger, “the woman everybody loved.” Victoria meets Saudi dynasty founder Ibn Saud, spies for the State Department in the Vichy embassy in Washington, D.C., and – for profound and moving personal reasons – accepts a mission into the heart of Nazi-occupied Eastern Europe. Underlying all Victoria’s travels is the struggle between the allies and axis for control of the crucial oil resources that drove World War II.

As the Cold War begins, the novel’s third episode recounts the historic 1951 moment when Britain’s MI-6 handed off its operations in Iran to the CIA, marking the end to Britain’s dark manipulations and the beginning of the same work by the CIA. But in Trabish’s telling, the covert overthrow of Mossadeq in favor of the ill-fated Shah becomes a compelling romance and a melodramatic homage to the iconic “Casablanca” of Bogart and Bergman.

Monty Livingstone, veteran of an oil field youth, European WWII combat and a star-crossed post-war Berlin affair with a Russian female soldier, comes to 1951 Iran working for a U.S. oil company. He re-encounters his lost Russian love, now a Soviet agent helping prop up Mossadeq and extend Mother Russia’s Iranian oil ambitions. The reunited lovers are caught in a web of political, religious and Cold War forces until oil and power merge to restore the Shah to his future fate. The romance ends satisfyingly, America and the Soviet Union are the only forces left on the world stage and ambiguity is resolved with the answer so many of Trabish’s characters ultimately turn to: Oil.

Commenting on a recent National Petroleum Council report calling for government subsidies of the fossil fuels industries, a distinguished scholar said, “It appears that the whole report buys these dubious arguments that the consumer of energy is somehow stupid about energy…” Trabish’s great and important accomplishment is that you cannot read his emotionally engaging and informative tall tales and remain that stupid energy consumer. With our world rushing headlong toward Peak Oil and epic climate change, the OIL IN THEIR BLOOD series is a timely service as well as a consummate literary performance.

Review of OIL IN THEIR BLOOD, The Story of Our Addiction by Mark S. Friedman

"...ours is a culture of energy illiterates." (Paul Roberts, THE END OF OIL)

OIL IN THEIR BLOOD, a superb new historical fiction by Herman K. Trabish, addresses our energy illiteracy by putting the development of our addiction into a story about real people, giving readers a chance to think about how our addiction happened. Trabish's style is fine, straightforward storytelling and he tells his stories through his characters.

The book is the answer an oil family's matriarch gives to an interviewer who asks her to pass judgment on the industry. Like history itself, it is easier to tell stories about the oil industry than to judge it. She and Trabish let readers come to their own conclusions.

She begins by telling the story of her parents in post-Civil War western Pennsylvania, when oil became big business. This part of the story is like a John Ford western and its characters are classic American melodramatic heroes, heroines and villains.

In Part II, the matriarch tells the tragic story of the second generation and reveals how she came to be part of the tales. We see oil become an international commodity, traded on Wall Street and sought from London to Baku to Mesopotamia to Borneo. A baseball subplot compares the growth of the oil business to the growth of baseball, a fascinating reflection of our current president's personal career.

There is an unforgettable image near the center of the story: International oil entrepreneurs talk on a Baku street. This is Trabish at his best, portraying good men doing bad and bad men doing good, all laying plans for wealth and power in the muddy, oily alley of a tiny ancient town in the middle of everywhere. Because Part I was about triumphant American heroes, the tragedy here is entirely unexpected, despite Trabish's repeated allusions to other stories (Casey At The Bat, Hamlet) that do not end well.

In the final section, World War I looms. Baseball takes a back seat to early auto racing and oil-fueled modernity explodes. Love struggles with lust. A cavalry troop collides with an army truck. Here, Trabish has more than tragedy in mind. His lonely, confused young protagonist moves through the horrible destruction of the Romanian oilfields only to suffer worse and worse horrors, until--unexpectedly--he finds something, something a reviewer cannot reveal. Finally, the question of oil must be settled, so the oil industry comes back into the story in a way that is beyond good and bad, beyond melodrama and tragedy.

Along the way, Trabish gives readers a greater awareness of oil and how we became addicted to it. Awareness, Paul Roberts said in THE END OF OIL, "...may be the first tentative step toward building a more sustainable energy economy. Or it may simply mean that when our energy system does begin to fail, and we begin to lose everything that energy once supplied, we won't be so surprised."

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